Vietnam Consumer Trends - Xu hướng người tiêu dùng Việt Nam - From TNS Vietnam

1. Vietnam’s shifting
consumer landscape
Ralf Matthaes
managing director
TNS Vietnam
AMCHAM
November 2010
Discover

2. Agenda
1. 2009 versus 2010
2. CIVETS - Vietnam’s emergence
3. A shift in population
4. Wealth
q Shift
q Source
q Who has it
5. Consumer spending priorities
6. Consumption & retail trends
7. 6 major product trends
8. Digilife - On-line behavior
9. TRU Youth - 12-19 years young
Discover

3. 2010 versus 2009 Review
Are things looking up?
2010 2009 FY
GDP = 6.5% (Oct) 6.7% YE Forecast 5.32%
Inflation = 7.5% (Oct) 6.88%
International
Trade deficit = US $13.5 Billion (Yr end) 12.3 Billion
Exports = US $68 Billion (Yr end) 58.5 Billion
Imports = US $81.5 Billion (Yr end) 68 Billion
FDI = US $12.8 Billion (Oct) 21.3 Billion
Tourism = US $4.47 Billion (Yr end) 3.7 Billion
A-T-L Ad growth = 6% (Sept.) 25%
Domestic
FMCG growth = 17% (Sept) 15.7%
Retail growth = US $45 B. (Sept) 61.5 B.
Consumer Confidence = 78 (Jan.) 64
Source: GSO / TNS / Kantar

4. B razil R ussia India C hina
CIVETS - Vietnam’s Global Emergence
Colombia Indonesia Vietnam Egypt Turkey South Africa
Discover

5. CIVETS GDP Growth 2009 - 2011
10%
10.0%
8.7% 8.9%
8.5% 8.3%
8.0% 7.2% 7.2%
5.9% 5.8%
6.0% 5.3% 5.5%
4.5%
4.0%
2.0%
0.0%
2009 2010 2011
China India Vietnam Indonesia
Except for China & India, Vietnam is expecting the highest GDP growth in Asia.
Over the next two years, GDP should grow by at least 12%.
Source: HSBC Global

6. CIVETS CPI Growth Rate
13.6%
14.0%
12.0% 10.9%
9.6%
10.0%
8.0% 7.0% 7.1%
6.8%
5.3% 6.0%
6.0% 4.8%
4.0% 3.1%
2.4%
2.0%
0.0%
2009 2010 2011
-0.7%
-2.0%
China India Indonesia Vietnam
One of the main barriers for growth is Vietnam’s
potential high inflation (16.6% over 2 yrs)
Source: HSBC Global

7. GDP / capita growth rate 2008 vs 2020
60,000 57,500
In USD (000)
50,000 47,000 46,400
40,000
34,200
Asian CIVETS & BRIC Members
30,000
20,000
12,700
10,000 3,700 3,005
6,000
4,600 3,900
2,800 2,800
-
USA Japan China Viet Nam Indonesia India
Vietnam looks to roughly double its GDP per capita in
the next 12 years or increase by over 60% by 2020
Source: Goldman Sachs / TNS analysis

8. Current situation
Base, n= 605 618 600 500
How would you describe your country’s current economic situation? 48% positive
Very Good 3 13 2 8
Fairly Good 44 24 26 40
Not good and not bad 23 35 41 39
Fairly Bad 26 15 23 11
Very Bad 3 12 9 2
How would you describe your country’s current employment situation? 48% positive
Very many available jobs 3 11 0 10
Many available jobs 13 17 11 38
Not many but not few 22 28 44 32
Few available jobs 39 23 31 18
Very few available jobs 21 22 13 1
Consumers in Vietnam are the most upbeat about
both economic and employment prospects
Source: TNS AP Temperature check 2010

9. Future expectations
Base, n= 605 618 600 500
In the next six months, what do you think will be your country’s economic situation? ? 68% positive
Much better than today 10 12 6 15
Somewhat better 44 32 32 53
Same as today 34 21 49 26
Somewhat worse 8 16 9 6
Much worse than today 2 17 2 1
In the next six months, what do you think will be your country’s employment situation? 69% positive
Many more jobs available 3 15 3 18
Some more jobs available 25 22 21 51
Same as today 41 21 49 24
Less jobs available 18 23 16 6
Many less jobs available 8 19 8 0
Syndrome of “jobless recovery” seem to pervade consumer minds
in emerging markets. Again Vietnam seems to buck the trend somewhat
Source: TNS AP Temperature check 2010

10. A shift in Population
Discover

11. Vietnam Population Pyramid
15.4 0-9 years 15.4 The next ten years will
see 17 million new and
19.9 10-19 years 19.9 young consumers enter
the market
15.7 20-29 years 15.7
15.5 30-39 years 15.5
14.3 40-49 years 14.3
9.5 50-59 years 9.5
6.6 60-69 years 6.6
1999
42.8 Million aged 20 + = 56% population
3.4 70+ 3.4 2009
55.6 Million aged 20 + = 65% population
Source: VN GSO 2009, TNS analysis

12. Vietnam’s aging population pyramid
1999 2009
76,323,000 86,024,000
44.5 % 0-19 35.9 %
32.9% 20- 39 31.7 %
15.3 % 40- 59 24.2 %
7.3 % 8.2 Age = 60 +
Vietnam’s population is becoming more mature, thus
creating a wealthier, more savvy consumer base
Source: VN GSO 2009, TNS analysis

13. Vietnamese Wealth
The
tip of the
iceberg or
bottom of the
financial pyramid
????????????????
Discover

14. The Source of Wealth
Discover

15. 2009 – Revenue By type of companies
Base: Business revenue = US $94.84 Billion
18%
36% State
Collective
Private
Household
30% Foreign investment
5%
11%
Private state and household businesses are driving domestic
growth and exports, which is partially why Vietnam’s economy has
been able to shrug off the effects of the global meltdown
Source: GSO

16. 2009 – Revenue sources of income
Base: GDP = US $94.84 Billion
Export in billions of USD
Government 2010 spend = US $33.5 Billion
State Ow ned company
7% 3% 1% revenue in billions of USD
Real estate transaction in
21% billions of USD
FDI in billions of USD
57% Tourism revenue in billions of
3% USD
8% Money remittance in billion of
Exports are Vietnam’s lifeblood, accounting USD
for almost 60% of revenue generation Others
Source: GSO

17. 2009 – Revenue sources of Sectors
Agriculture / Forestry
Base: GDP = US $94.84 Billion
Fishing
3%
Mining
3%
Manufacturing
4%
6% 17%
4% Electricity / gas / w ater
4%
4% Construction
Wholesale / retail trade
10%
15% Hotels and restaurants
7% 4% 19% Transport / communications
Real estate
Agriculture / forestry, manufacturing Public administration
& retail make up over half of GDP
Education and training
Other sectors (7) under 2 billion
Source: GSO

18. Who has the money?
Discover

19. Vietnam declared monthly household income
Wealthy
A1 1.5%
1.5% = 1.3 million
Affluent A 3.9%
9.5%
= 8.2 million B 5.6%
Middle C 11%
26%
= 22 million D 15%
BOP
E 29%
63%
= 54 million
F 34%
Two thirds of Vietnam’s population is still eking out a day to
day existence, while 5% are as affluent as the western world
Source: TNS Vietnam

20. Source: TNS Vietnam
Urban declared income
The Christmas tree
Wealthy
4% A1 3.7%
= 1 million
A 10.8%
Affluent
24%
= 6.2 million B 13.5%
C 21.6%
Middle
44%
= 11.4 million D 22.2%
E 21.4%
BOP
28%
= 7.2 million F 6.8%
As far as luxury goods and services, the market is still estimated
to be small roughly 4%-15% of urban households, the equivalent
1 million to 4 million consumers or 800,000 – 200,000 households

21. Rural declared income
The Bottom of the Pyramid
A1 0.6%
Affluent A 1%
3%
= 1.2 million
B 1.6%
C 6.9%
Middle
19%
D 12%
= 11 million
BOP E 31.9%
78%
= 47 million F 46%
Almost four of every 5 rural consumers still are BOP,
thus placing VN wealth into perspective
Source: TNS Vietnam

22. Urban / Rural Durable ownership
Color TV 95% 99%
Moto 81% 96%
Handphone 63% 94%
DVD 77% 92%
Fridge 24% 85%
Washing machine 5% 61%
Rural Urban
Most major appliances and media devices are the norm in Urban Vietnam
Source: TNS Vietnam

23. Urban / Rural Durable ownership
PC 7% 50%
Internet 2% 39%
Air con 1% 32%
Microw ave 1% 22%
Camera 2% 18%
0.2%
Car 1%
Rural Urban
Rural Vietnam still lacks behind on many major creature features
Source: TNS Vietnam

24. Evolution of urban household income
VietCycle 08 48 46 6
VietCycle 06 73 23 4
VietCycle 99 84 14 2
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
SEC DEF (VND 750,00 - 4,500,000) SEC BC (VND 4,500,001-13,500,000)
SEC A+ (VND 13,500,001+)
The wealthy income class has increased by 33%, while the
middle class in urban Vietnam has doubled in two years
Source: TNS VietCycle 1999-2008

25. Spending priorities
Discover

26. Consumers spending in 2010?
More Same Less Don't know
Education 57 34 8 1
Food & beverages products 40 52 8 0
Health care products/ services 34 53 12 1
Transportation 32 48 19 1
Household utilities 29 59 12 0
]
personal equipment (mobile phone, laptop ,Etc) 27 51 21 1
Personal care products 25 59 16 0
Communications: telephone/ fax/ email 24 55 21 1
House hold care products 22 61 16 1
Home appliances (wash machine, tv, hiFi, Etc) 22 55 23 1
Entertainment & dining out 22 49 28 0
Every sector save for 2 show increased spend in 2010, compared
to 2009, where only two sectors showed growth spend
Source: TNS VN Consumer Confidence Poll, Jan. 2010

27. Total Expenditure & Savings – HCMC & Hanoi
2009 81 19
2008 91 9
2006 88 12
2001 86 14
1999 83 17
0% 20% 40% 60% 80% 100%
Total expenditure Saving
Until the global economic meltdown, Vietnamese savings
were dropping year on year. Now caution is the word.
Source: TNS VietCycle – 1999-2008

28. Most desired purchase items (not owned)
HANOI HCM CITY
26 Washing machine 35
20 PC/Desktop 28
33 Air conditioner 24
23 Digital camera 20
30 Car 20
34 LCD/Plasma TV 17
25 Laptop 14
Hanoians have much higher aspirational purchases that do Saigonese
Source: VietCycle 2008

29. Consumption & Retail
Trends
Discover

30. FMCG market growth rate across Asia (value)
9.1
China (national urban)
8.9
South Korea
7.7
7.0
Malaysia (Peninsula)
1.9
11.6
Philippines
4.6
3.2
Taiwan
10.1
8.7
Thailand
4.5
15.7 MATQ209
Vietnam (4 urban cities)
17.2 MATQ210
Vietnam’s FMCG market continues to shine in Asia in 2009
Total FMCG value growth (%)
Source: Kantar Worldpanel – Total FMCG – Households Panel

31. FMCG category Growth drivers
FASTEST GROWING CATGEORIES IN 2009
Baby Wipes / Diapers RTD Tea Deodorant
Box Tissue Sugar free variants Hand Washing
Energy Drink Halo of the H1N1 virus
Table Napkins
Drinking Yogurt Bleach
Granules
Liquid Milk Bathroom / Floor
RTD Tea
Cleaner
Instant Coffee Soya Milk
Baby Wipe and Diapers
RTD Coffee Mineral Water
Granules (from MSG)
Convenience
Health & Hygiene &
Energy Safety
31

32. Changing FMCG shopping habits
Purchase frequency (days) Avg number of packs per trip
198 7.8
196 7.6
194 7.4
192 7.2
190 7
188 6.8
186 6.6
184 6.4
MATQ208 MATQ408 MATQ209 MATQ409
Urban consumers have the tendency to purchase less frequently,
but are buying much larger pack types = Bulk Purchasing
Total FMCG – Excluding Gift
Source: Kantar Worldpanel – Household Panel – Vietnam urban 4 key cities

33. Channel value share of FMCG
2009 19 63 12 6
2005 15 61 15 9
Modern Trade Street Shop Market Others
Traditional trade is still dominating the Vietnamese retail
landscape but modern trade continuously gain grounds
Total FMCG excluding gift
Source: Kantar Worldpanel – Total FMCG – Household Panel - 4 key Urban cities

34. The Growth of FMCG channels
HYPER-
20
SUPERMARKET
STREET SHOP 14
ALL RETAILERS 11
MARKET 8
WHOLE SALERS -9
SPECIALTY -12
Hyper-supermarket leads the FMCG growth
Total FMCG excluding gift – 2009 vs 2008
Source: Kantar Worldpanel – Total FMCG – Household Panel - 4 key Urban cities

35. 6 Major Product Trends
Discover

36. Three ingrained product trends
indulgence
89% said “I buy brands that are of good
quality, even more expensive”
convenience
75% are prepared to pay more for products
that make their life simpler
Health & safety
88% said ‘I am ready to pay a higher
price for healthier foods’

37. Three new and upcoming product trends
technology
79%, I will most likely buy a new phone in the
next six months
Self expression /
differentiation
29% I blog to express
Status / Aspiration myself
56%, I like to use brands which
show my success

38. Vietnam’s most admired people
Mỹ Tâm 30
Đan Trường 19
Cẩm Ly 18
Đàm Vĩnh Hưng 17
Lam Trường 14
Lê Hòang Quân 14
Cristiano Ronaldo 12
Beckham 11
Quang Dũng 8
Bill Gates 8
Aspirational role models and advertising are starting to take route
Source: TNS VietCycle 2008

39. Vietnamese Youth
12-
12-19 years young
Discover

40. TV is the No. 1 source of news and information,
but internet is catching fast…
84%
58%
24% 58%
13%
5%
Top sources to get news and information

41. Thanks to high presence of cable TV, foreign
channels have become teen favourites
31 VTV3
23 HBO
The number of 10 TV
networks that are foreign
19 HTV7
Disney
12
Channel
11 Yeah 1
Favorite TV channels

42. Online activities are all about…
Information, Socializing, Music and Games
93% Used a search engine
91% Talked to someone in a chat room
83% Searched for hobbies or interests
81% Listened to MP3s
79% Played a single-player game
79% Send an instant message
74% Visited a news, sports site
Online activity incidence in past 30 days

43. However, alternative channels still hold stock
In school
14%
Website
Fliers
14%
14%
PoS
12%
TV
77%
Magazines
12%
outdoor
Preferred ways to receive important 14%
information from company

44. It is true that TV still rules! But did you know…?
57
Percentage of teens
have clicked on an
online ad in the past
30 days
Don’t underestimate the potential of the internet for
reaching teens!

45. Family still plays a significantly role in teen life
outside school
TEEN males TEEN females
41% Spending time with parents 51% Spending time with parents
40% Going online
45% Watching TV, movies
36% Watching TV, movies
36% Spending time with friends
36% Spending time with friends
30% Going online
22% Spending time with family
24% Listening to music
20% Spending time with family
19% Listening to music
Free time activities

46. Soccer for guys and badminton for girls
39 MICHAEL PHELPS
TEEN males TEEN females
61% SOCCER 50% BADMINTON
46% BADMINTON 31% SWIMMING
34% SWIMMING 30% FITNESS WALKING
26% JOGGING/RUNNING 21% BICYCLING
21% FITNESS WALKING 20% JOGGING/RUNNING
Sports Participation

47. Teens care about being healthy and maintaining a
positive outlook – securing their future
Ea n h thy
g eal
74%
Caring about
environment
62%
Being patrio c
55%
Being drug-free
35%
Delaying sex un l
marriage
48%
TRU Trends Arc - Top 5 concerns

48. In a changing world, traditional family values are
still relevant for Vietnamese teens
61% Family Dinners
37% Going to Coffe H es
e ous
34% Singing Karaoke
33% Da n
g
27% Being on a sport team
TRU Trends Arc - Top 5 Activities

49. DVR and PC games are ‘IN’ for teens, social
networking sites gaining on Smart Phones and Blu
Ray in coolness..
45% DVR
43% PC Games
40% Blu-ray Player
38% Smart Phones
37% Social Networking Sites
TRU Trends Arc - Top 5 Technology

50. What are the reasons Teens rate their brands as
favorites?
Reasons for Favorite Brands
59% Top quality
39% Innova v g ound- b eaki n
e, r r g
38% Well designed, easy to use
34% Affr dabl e g
o , ood v u o the m ney
al e f o
27% Great adver si n a m r ke ng
g nd a
TRU Favorite Brand Meter

51. Vietnamese Teens top 10 brands
29% NOKIA
28% COCA - COLA
20% PEPSI
19% HONDA
18% SAMSUNG
17% KFC

52. Digital on-line behavior
on-
Discover

53. Vietnam is the 17th highest engaged on line
community in the world
% online users highly engaged
Country % Country % Country % Country %
1.Egypt 56% 13.Italy 47% 25.USA 43% 37.Netherland 33%
s
2.S Arabia 56% 14.Poland 46% 26.Tanzania 42% 38.Philippines 32%
3. China 54% 15.Thailand 46% 27.S Korea 42% 39.Norway 30%
4. Malaysia 53% 16.Argentina 45% 28.Portugal 40% 40.Sweden 27%
5.Turkey 52% 17.Vietnam 45% 29.Mexico 40% 41.Luxemburg 27%
6.S Africa 51% 18.Uganda 44% 30.Greece 38% 42.Finland 26%
7.Kenya 51% 19.Israel 44% 31.Canada 37% 43.Estonia 26%
8.Morocco 51% 20.Hong Kong 44% 32.Spain 37% 44.Denmark 25%
9.UAE 50% 21.UK 43% 33.Austria 36% 45.Indonesia 24%
10.Brazil 48% 22.Nigeria 43% 34.Belgium 36% 46.Japan 20%
11.France 48% 23.India 43% 35.Germany 36%
12.Singapore 47% 24.Russia 43% 36.Australia 35%
53
Digital Engagement – See methodology pack
Base: All respondents 48804

54. Using the internet is the 3rd highest daily activity in
Vietnam, which will quickly elapse reading newspaper
% Using at least once a day – Vietnam
Read a printed newspaper 41
Make calls to friends/ family on a landline phone 31
Play sports/ visit a fitness center 30
Visit a restaurant or bar/ pub 10
Go out with friends/ meet friends ( 35
Watch a film at the cinema 5
Watch DVDs 18
Access the internet 39
Read a printed magazine 24
Listen to the radio 22
Watch regular free-to-air or Pay TV broadcasts 76
54
S5: How often access / i10: Usage of offline media
Bases: All respondents n = 600

55. E-mail, News, Search & Multi-media are the
highest daily user activities
% doing activity
Daily Ever
100 100 98 100 98 100
95 92 90
84
75
76 72
62 55 63
49 51
43
32 27 29
Global benchmarks daily use
46 72 39 19 21 12 24 55 46 37 27
55
I1: Frequency of online activities
Bases: All respondents n = 600

56. Vietnamese are very open to brand
interaction on-line
Attitudes to brand interaction within activities
82
66 67 69 67
60 63
51 46 41
% open to 30
brands
1 3 5 1 1 1 4 1 6
% who find 10
17
brands
intrusive
56
I4: Intrusiveness of brand contact
Bases: All respondents who ever do activity n = 600

57. Half of Vietnam’s on-line community engaged
in social networking, almost all through PC
% social networking
98 Daily Ever
95 96 93 94
87
81 80
76
67 64
54 57
49 42
28 28
14
Vietnam Philippines Thailand Indonesia India China Australia Hong Singapore
Kong
57
I1.01: Usage frequency of SN
Bases: All respondents 713 / 859 / 506 / 868 / 2343 /
12151 / 493 / 141 / 106

58. Brand communities are driven by; gaining more brand
info, seek promotions info and benefits of promotions
Reasons to join brand community
To get more information about a brand To support a brand I enjoy
To connect with a brand I like To do as my friends did ( already fans of the brand)
To seek for promotions or special offers To use specific apps promoted by the brand
To benefit from a promotion of specific offer
61 63
59
47 44
36
16
Vietnam Global
58
N13: Reasons for potential brand friending on social
networks
Bases: Social networkers VN = 676 / Global = 41813

59. 50% of Vietnamese are communicators & a
quarter are influencers (high consumption / involvement)
% incidence
3 6
11 7 19
26 25 23
21 1 0 27
33
39
10
7
22
19
19 33
48 21
2 40 15
83 87 20
13
17
24 6
9
45 12
11
10
3 3 9
26
9
10 10 11 14
6 3 2
0
Vietnam Philippines Thailand Indonesia India China Australia HK Singapore
COMMUNICATORS
I just love talking and expressing myself, I express myself in the online in the way
that I can’t in the offline one. I tend to be a smart phone user and I’m connecting online
from my mobile, at home, at work or at college.
INFLUENCERS 59
The internet is an integral part of my life. I’m young and a big mobile Internet user
and access everywhere, all of the time.. I’m a blogger, a passionate social networker.
I’m also a big online shopper and want to be heard on-line.

60. Thank You / Cam On
www.tnsglobal.com
For a copy of this presentation, please email me at…
ralf.matthaes@tnsglobal.com
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